with respect to India -what is finance act ? what is previous year and assessment year?



for calculating income tax on the income of 2010-2011 which finance act applies? whether financial year and previous year are the same? to calculate advance tax and tds in respect of income of 2010-2011 which finance act applies? pls explain in detail.

with respect to India -what is finance act ? what is previous year and assessment year?
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2 Replies to “with respect to India -what is finance act ? what is previous year and assessment year?”

  1. According to income tax act 1961, for the financial year of2010-11 assessment year of 2011-12 will be applicable. So to calculate tds and advance tax the provisions which are applicable for 2011-12 will be applicable. The previous year is the year which is preceding to the assessment year. Hence for the ay 2011-12 py will be 2010-11 it is applicable to financial year 2009-10.


  2. Every year, Finance Minister presents financial budget incorporating new provisions and amending existing provisions by way of amendments. When the same is approved by President, it becomes an Act, called Finance Act.
    Previous year is the year in which income is earned and Assessment year is the year in which earned income is assessed to tax by IT Department. Financial year is the year which begins from 1 April every year.
    For, Income of FY 2010-11 Finance Act 2010 applies.
    Thanks





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